China accounted for more than half of all investment permits issued by Zimbabwean authorities in the first quarter of the year, official figures obtained by Newshawks show, as global demand for lithium grows as commercial and domestic energy consumers migrate to alternative energy sources.
In the quest to achieve a net-zero global economy, lithium is becoming a highly sought-after commodity.
In the year In order to achieve the goal set in the 2015 Paris Climate Agreement, It warned that the global economy must reduce greenhouse gas emissions by at least 25% by 2030. °C
One way to achieve this goal is to take steps to reduce global carbon dioxide emissions to zero by 2050.
Data from the Zimbabwe Investment and Development Agency (ZIDA) shows that more than a third of the total investment recorded between January and March 2023 came from China, as Zimbabwe looks to become a significant player in the lithium industry.
The figures show that China accounted for 72 of the 116 investment permits issued by source countries in the first quarter of the year. The world’s second largest economy follows Zimbabwe with only 12 applications, with India and the United Kingdom third and fourth respectively.
According to the official statistics obtained from Zida, the total investment value registered during the first quarter of this year is 154.5 million US dollars, which includes 64.45 million dollars from foreign capital; Equity $26.86 million; Loans of US$2.41 million and domestic assets of US$60.77 million respectively, which includes domestic funds and raw materials.
The first quarter (Q1) report states, “Global growth in renewable energy is driving application as investors’ demand for the sector continues to increase.”
“In Q1 2023, 36% of all permits were awarded to lithium investors (exploration, mining and processing). The strong trend began in 2022 and is expected to continue through the rest of 2023 and beyond.”
Despite rising interest in the mining sector, particularly mining, the authority expects the manufacturing sector to receive “significant” investment next year, Zida said.
Zida’s chief investment promotion officer Silibaziso Chizwina said at a media engagement workshop: “Over the years, we have noticed that some investors have shifted to different sectors and started investing in different investors.”
“Based on what’s been happening over the years, we think we’ll achieve $2 billion in retention investment in the country by 2023. To do that, we need to bring in the right investment from the right investor.”
Experts say that as the global economy moves to a net-zero state, demand for raw materials critical to many clean energy technologies will increase.
Such minerals include lithium, copper and nickel. The International Energy Agency It estimates that by 2040, global demand for these valuable minerals could exceed the current demand for coal.
According to open sources, lithium production and processing operations are mainly concentrated in Australia, Chile and Brazil.
According to the World Economic Forum, 540 000 metric tons of lithium will be mined globally by 2021.
Such figures pale in comparison to the approximately 10 million metric tons of untapped lithium resources believed to exist in the Biquita Lithium Project. Experts estimate that 20% of the world’s lithium demand could be met if Zimbabwe were to fully exploit its reserves.
The state of the lithium sector
For now, efforts to increase lithium production are seen as a silver lining to Zimbabwe’s faltering economy. Officials expect to build a $12 billion mining industry by the end of the year, with gold, lithium, platinum group metals and chrome at the center of this ambitious project.
The country, which is suffering from high inflation and a depreciating currency, among other social and economic problems, has the largest lithium reserves in Africa and the sixth in the world. Zimbabwe is estimated to have the largest number of lithium projects on the African continent.
The South African country has reportedly invested heavily in the lithium industry despite concerns from some local communities about the mineral’s exploration.
Pressure groups say the surge in applications through the country’s investment promotion agency should prompt officials to review the mining regulations.
Public opposition to lithium mining in areas such as Bikita and Mutoko, as well as the smuggling trade and the declaration of the mineral, are said to have fueled the flow of illegal money into the country.
Who is mining lithium in Zimbabwe?
Zimbabwe has reported some major lithium projects from 2021 which include: US$ 422
million deal in which Zhejiang Huayu (the world’s largest cobalt producer) acquired the right to control Zimbabwe’s Arcadia mine [Prospect Lithium (Pvt) Ltd]; Premier Africa Minerals Limited’s joint venture agreement with Li3 Resources Inc to acquire a 50% interest in Premier’s lithium properties in Mutare. Acquisition of 100% stake in Hong Kong Sinomin African Metals Management Services and South African Metals & Minerals for US$180 million (Bikita Lithium Mine). And recently, a joint venture between China Natural Resources Inc, Feishang Group Limited and Top Pacific (China) Limited could acquire Zimbabwe’s lithium mine worth an estimated $1.75 billion.
Just this week, Prospect Lithium’s US$300 million spodumene, pethalite and tantalite processing plant, believed to be Africa’s largest, was unveiled as Chinese giant Hai Cobalt expands its footprint in Zimbabwe.
The 4.5 million ton annual capacity plant has shipped more than 30,000 tons of lithium concentrates since commercial production began in April this year.
Prospect Lithium Zimbabwe has achieved a revenue of about $40 million from a shipment of 30,000 tonnes of lithium since April and our ambition is to be a market leader in the renewables and technology market so we are committed to ensuring that Zimbabwe is at the top of the sector,” said Prospect Lithium Zimbabwe Chairman George Fang.
UK exploration company Red Rock Resources expects to begin lithium testing in Zimbabwe this year after finding prospects at Biquita and Arcturus last year.
What authorities are doing to increase revenue from lithium.
The most important recent development in the lithium mining space is the December 2022 ban on the export of unprocessed lithium by the government of Zimbabwe. Lithium-Bearing Minerals and Unused Lithium) Order, 2022.
In terms of the regulations, no lithium-bearing ores or non-useful lithium shall be exported from Zimbabwe except with the written consent of the Minister of Mines and Mineral Development.
The government hopes that the ban will in the long term open up additional benefits by increasing the value of lithium production in the country, as it can relocate and set up processing firms in Zimbabwe, especially in the manufacturing area.
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